compliance guide - MCX

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Compliance GuideCircular No. MCX/007/2005 dated January 03, 2005, Circular No. MCX/003/2006 datedJanuary 03, 2006 and Circular No. MCX/012/2006 dated January 10, 2006.‣ The Exchange has prescribed guidelines for advertisements. Hence, the Member shallissue/circulate/publish advertisement as per guidelines prescribed by the Exchange orrelevant authority from time to time.‣ Further, before publishing any such kind of advertisement (i.e.: for soliciting their business)which may be in the form of booklet, leaflet, pamphlet etc.), they must obtain priorapproval of the Exchange.‣ Further, the Members are required to ensure strict adherence to Circular no.MCX/COMP/332/2013 dated October 4, 2013 and MCX/COMP/349/2013 dated October 15,2013 which disallows the Members to publish any advertisement / publicity highlightingonly the benefits of futures market without highlighting the risk involved.9. Market data:As per Circular no. MCX/TECH/247/2013 dated July 11, 2013, Members may note that the marketdata provided by the Exchange is used only for the purpose of trading and is not used for anyother purpose which is not approved by the Exchange.10. Circular Trading, cross deals, price rigging, price manipulation and other marketAbuses:As per Bye-law 2.3.20, Bye-law 2.3.31, Bye-law 2.3.96, Business Rule 24 (d) and 36, the membershall ensure that he is not involved in circular trading, cross deals, price rigging, pricemanipulation and other market abuses.It may be noted that cross deals executed in proportions higher than a threshold shall beconstrued as fictitious transactions and a penalty of Rs.1 lakh to Rs. 5 lakhs shall be applicablefor such transactions in accordance with Circular no. MCX/COMP/113/2010 dated April 5, 2010(refer Circular no. MCX/T&S/325/2014 dated October 08, 2014 and MCX/T&S/330/2014 datedOctober 13, 2014).Further, the Exchange may consider any other criteria or trading pattern and any othercircumstantial evidence to identify other forms of market abuses and impose penalty and / ortake additional disciplinary actions in accordance with the Rules, Bye-Laws and Business Rules ofthe Exchange.11. Certified Commodity Professional CoursesMembers are advised to enroll for Certified Commodity Professional Examination as per CircularNo. MCX/TRN/260/2007 dated July 24, 2007. Further the members are required to have at leastone person in their office who is MCCP qualified.12. Code of Conduct for MembersAll Members are required at all times to abide by CODE OF CONDUCT of the Members asdefined in Bye Law 14 of the Exchange.- 44 -
Compliance Guide13. Compliance with Regulatory DirectivesThe Members shall comply with the directives issued by FMC and the Exchange from time totime. This inter-alia includes margin requirements, trading restrictions, base minimum capitaletc., Submission of audit reports along with the annual accounts to the Exchange and paymentsof transaction charges are other requirements. Further, the member should ensure thefollowing:‣ The Member has not transacted with suspended/defaulter/debarred Members or anyother Members by SEBI/BSE/NSE/other stock/commodity exchanges.‣ The Member does not have any dealings with unregistered sub-Members.‣ Real time trading in a commodity by opening the terminals of foreign commodityexchanges in India without prior approval of the Central Government or FMC, as the casemay be, would be deemed as illegal and persons entering into such contract would bepunishable under Section 21 of the FCR Act, 1952.‣ No Member will trade for the purpose of creating or inducing a false market incommodity.‣ With respect to the FMC directives on the segregation of BPO/KPO services from theCommodity Derivatives Market.14. Appointment of Compliance OfficerIt is mandatory for every Member to appoint a Compliance Officer who will be responsible formonitoring the compliances of the member in respect of various circulars, guidelines,notifications, etc. issued by the Exchange / FMC or any other relevant authority from time totime as per Circular No. MCX/207/2006 dated May 19, 2006 and keeps the Exchange informedof the appointment of a Compliance Officer. It is necessary that the Exchange be also informedfor any change in the Compliance Officer15. Adherence to Anti Money Laundering normsAppointment of Principal Officer:As per Circular No. MCX/COMP/488/2009 dated November 27, 2009, Members / intermediariesare required to designate a senior management officer as Principal Officer, who will beresponsible for monitoring and reporting of all transactions and sharing of information asrequired under the law. The name, designation and address (including e-mail address) of the‘Principal Officer’ should be intimated to the Office of the Director-FIU, 6th Floor, Hotel Samrat,Chanakyapuri, New Delhi – 110021. (Refer Circular No. MCX/COMP/488/2009 dated November27, 2009)It must also be ensured that the Member adheres to the Anti-Money Laundering norms as perCircular No MCX/COMP/488/2009 dated November 27, 2009 and Circular no.- 45 -
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